Expert Guide to Paying off Credit Card Debt

Updated: March 21, 2024

Updated: March 21, 2024

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Credit card debt can be challenging to tackle. There’s the stress of possibly mismanaging it, accruing high-interest charges and late fees or potentially decreasing your credit score. Fortunately, learning about strategies to pay off your credit card debt, familiarizing yourself with common pitfalls in debt repayment and practicing smart spending habits can help you find credit card debt relief. MoneyGeek explores these topics and more in this comprehensive guide.

Credit Card Debt in the US: By the Numbers


Credit card debt continues to increase in the U.S., with almost half of credit card holders having revolving debt.

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Credit card debt is among the most common forms of debt in the U.S., with more than 500 million open accounts as of 2022. That same year, around 191 million individuals had at least one credit card account.

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Based on the latest data from the Federal Reserve Bank of New York, the total credit card debt in the country reached $925 billion in Q3 2022. In comparison, that’s about $38 billion more than the previous quarter and a 15% year-over-year increase.

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The average credit card balance in the U.S. was $3,282.62 in 2022.

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Credit card debt has two components: Transactions from the previous month and revolving debt (the balance carried over month to month). Nearly half of credit card holders had revolving debt in 2022.

Common Roadblocks to Paying off Credit Card Debt and How to Navigate Them

A credit card can be a good payment option—it can improve your credit and provide some theft protection. However, improper use can lead to debt and harm your finances, which goes beyond late fees and a drop in your credit score.

While working on getting out of debt can be stressful and affect your overall well-being, identifying your roadblocks can help you find a pathway forward.

Overcoming Hurdles in Debt Repayment

Dealing with credit card debt can be challenging, including tracking due dates, determining how to pay down debt with other bills, and planning for unexpected expenses. When carrying credit card debt, it can be difficult to know where to start. However, you can get out of debt faster by starting with small, strategic steps.

Not Knowing Where to Start

The first step to financial freedom is listing your debts. If you have multiple creditors and find paying them all difficult, take care of one debt first and make minimum payments on the others. If you have extra money, use it for debt repayment. Focus on the next debt on the list as soon as you finish one, and so on.

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Knowing your debt will help you determine how much you need to pay on each date. The following pages may help:

  • Most credit card issuers report their borrowers’ account details to at least one major credit bureau. You can find open, closed and delinquent accounts in your credit report. Your report may not reflect some debts because it isn’t updated in real-time.
  • MoneyGeek’s Compound Interest Calculator: Understand how compound interest works. Estimate how much you will owe in interest on your credit card debt.

Not Making Enough Money to Pay Down Your Debt

If your income isn’t enough to meet your monthly payments, it’s time to find ways to get more money. There are two options: decrease your expenses and increase your income.

Determine aspects where you can save money, such as rarely used subscriptions. If possible, consider getting a part-time job while you’re still in debt.

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Achieving financial independence may require a few sacrifices. Learn how better to manage your money with the help of the following:

Having Difficulties in Tracking Payment Due Dates

Failure to make timely payments can further increase your debt. Take note of your due dates. You can set up alarms on your phone or highlight the dates on your calendar. Setting up automatic payments may also help.

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Consider using a bill calendar or download a mobile app to keep track of your payment due dates.

  • CFPB’s Bill Calendar: Download the Consumer Financial Protection Bureau’s free bill calendar and keep track of your monthly dues.
  • MoneyGeek’s Expert Curated Budgeting and Savings Tools: This list includes budgeting and savings tools you can use in managing your finances. It also provides tips on how to choose the right app.

Unexpected Expenses

Unexpected expenses can dent your finances. That’s why having an emergency fund as a safety net is essential.

If you have an emergency fund, you can use it to cover any unexpected expense while still paying off your credit card debt. If you don’t have one, consider reviewing your priorities to determine where to use your money best.


Having an emergency fund can help you overcome various financial challenges. Here are some resources to help you get started:

Choosing the Right Credit Card Payoff Strategies

The best debt repayment method may vary per person. Consider your financial situation and needs when choosing a payoff strategy.

While paying off debt, avoid adding more debt. If possible, put as much income as possible towards your repayment.

Snowball Method

Biggest Strength
Pay down easy-to-handle debt sooner.
Who It’s Best For
Best for people who have credit cards with similar interest rates.

The debt snowball method is relatively simple but counterintuitive: you pay off the smallest debt first, then the second smallest, and so on. Like rolling a snowball that gets larger as it rolls, the consumer begins by paying a small debt, gradually working up to the bigger-sized undertaking, empowered by momentum.

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Let’s say you have three credit cards with balances of $7,000, $5,000 and $2,500. You start your repayment by paying off the $2,500 balance first. After this, you focus on the $5,000 balance and then the $7,000 balance.

Avalanche Method

Biggest Strength
Pay less over time.
Who It’s Best For
Best for borrowers whose credit cards have different interest rates.

The debt avalanche method — sometimes called the debt ladder— focuses on interest rates. You pay off the balance of your credit card debt by tackling the debt with the highest interest rate first, then the debt with the second-highest interest rate, and so on. From a purely financial perspective, this strategy is the most efficient way to pay off your debt quickly while paying the least interest.

Example of Debt Avalanche Method

Start by listing your credit card debts. Rank them in order of interest rates, with the highest on top of the list. Here’s an example of how your list should look like:

Credit Card
Interest Rate
Payoff Order













Putting the credit card with 0% annual percentage rate (APR) last will allow you to focus on your other debts without worrying about high interest over time.

Debt Consolidation

Biggest Strength
Single payment and easy to track.
Who It’s Best For
Best for those who have multiple credit card debts with high-interest rates.

If you have multiple credit cards with different rates, limits and due dates, it can get overwhelming. Consolidating your credit card debts into one loan may make it easier to keep track of payments, and you may be able to lower your interest rate, but your debt principal doesn't change.

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If you have multiple loans with high-interest rates, debt consolidation may be right for you. For example, you have a $14,500 debt across three credit cards with high APRs. Taking out a debt consolidation loan that covers all your debt with a seven-year term and 5% APR will allow you to lower your monthly payments.

Balance Transfer Credit Card

Biggest Strength
Find lower interest rates and consolidate your debts.
Who It’s Best For
Best for multiple credit cards with outstanding balances.

A balance transfer credit card allows you to move all your credit card balances into one card account. Aside from reducing your monthly bills into one, you can also save on interest fees. Some credit card issuers offer 0% APR for a certain period, which can be advantageous for people trying to reduce their debts.

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For example, you consolidate your $14,500 debt into a balance transfer card with a 0% APR for 20 months in exchange for a 5% fee. Your new total will be $15,225. If you can pay $762 monthly for more than 20 months, you could likely pay off your debt without interest.

An illustrative image of a person doing the most common pitfalls when paying down credit card balance.

Common Pitfalls to Avoid When Paying Down Credit Card Balance

Many people make mistakes handling their credit cards. Sometimes, the cardholder faces more debt than they’re prepared for. Knowing the typical traps you should avoid when paying down your credit card balance will help you better manage your debt.

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    Missing credit card payments

    Failure to pay your credit card balance can lead to late fees, higher interest rates or damage to your credit. Consider setting up automatic payments to avoid missed or late payments.

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    Making only minimum payments

    Although it’s okay to make minimum payments occasionally, doing it all the time can lead to longer repayment periods and higher debt due to the interest. If possible, try to pay your total balance monthly.

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    Dealing with multiple balances at once

    It may seem like a good idea to pay off all your debts. That may help if you can afford to make multiple payments. However, if you’re struggling to meet your monthly dues, consider using the snowball, avalanche or consolidation method.

Money Habits to Getting Out of Debt Faster

Seeing a huge amount in your credit card balance can be stressful. But taking charge of your finances is important to avoid getting overwhelmed by your debt.

Taking extra steps to keep things under control can help you reduce your debt faster. You can start by developing healthy habits, such as budgeting and getting professional help.

Set up a budget

Establish a budget based on your financial situation and responsibilities. This will help you stay on track and avoid unnecessary expenses.

Stop using credit cards

If overspending is an issue, it’s best to stop using credit cards. Switch to cash to ensure that you don’t go beyond your budget.

Set a target

Having financial goals aside from paying off your debt is also important. Having other financial goals can inspire you and keep you motivated.

Seek help

You should know when to get help. There are online groups where people share their debt journey. You can also contact professionals who can provide financial advice suitable for your situation.

From Debt to Freedom: Real-Life Credit Card Debt Success Stories

Credit card debt is a problem millions of Americans face. It can lead to various consequences, making the whole ordeal even more stressful. That said, it’s not impossible to overcome such a challenge. Here are some individuals sharing lessons they’ve learned and a few tips to help you deal with credit card debt.

  1. What’s the biggest challenge you faced when paying off your credit card debt? How did you overcome it?
  2. What lessons can you share with people struggling to pay off their credit card debt?
  3. What’s the best tip/advice you have received during your journey from debt to financial freedom?
Dennis Shirshikov
Dennis ShirshikovStrategist at
Jake Hill
Jake HillCEO of DebtHammer
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Once you’re debt-free, your next step is to ensure you’ll stay that way. Start building an emergency fund, which will help you with unexpected expenses. Generally, you should have enough to cover at least three to six months’ living expenses.

You can use MoneyGeek’s Cost of Living Calculator to estimate how much money you may need to set aside for your emergency fund.

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How to Find Relief from Credit Card Debt

Utilizing available resources can help you deal with a huge credit card debt. If you can’t afford to make payments, you can turn to debt relief programs or credit counseling agencies. You can find government and nonprofit organizations offering assistance. If all else fails, you may also consider filing for bankruptcy.

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    Nonprofit debt relief

    Some nonprofit agencies offer debt management programs, which could help you reduce your debt without the need to take out a loan. Before doing business with a debt relief service provider, check with your state Attorney General or consumer protection office.

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    Government debt relief

    Find government programs to help low-income households manage their finances. Some grants provide money that you can use for living expenses. You can use your income to pay off your credit card debt.

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    Military debt relief

    Members of the military and veterans may get lower interest rates on their credit card debts because of the Servicemembers Civil Relief Act (SCRA). You can find qualification requirements by contacting your local Armed Forces Legal Assistance office.

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    Credit counseling

    Credit counselors can help you develop a budget and manage your debt. They usually look at your financial situation and work with you to develop a long-term plan to get you back on track. You can search the Department of Justice's list of approved credit counseling agencies here.

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    If all else fails, you may have to consider filing bankruptcy. Bankruptcy can help you start fresh, wiping out your credit card debt and protecting your assets from creditors. If you decide to go this route, hire an experienced bankruptcy attorney.

What Happens When a Credit Card Payment Is Overdue

Not paying off your credit card debt has various consequences. The extent depends on how long you haven’t been making payments.

For instance, late payments for 30–120 days will affect your credit score. If you fail to repay your debt in six months, the bank will charge off your account and consider it a loss. This means you no longer owe them money. However, this will be recorded in your credit report for the next seven years, alerting other lenders and issuers.

Number of Days Overdue
What Will Happen

30 days late

  • Credit score takes a hit
  • Bank (A.K.A. creditor) hits you with late fees
  • Bank calls you seeking payment

60 days late

  • Bank calls seeking payment
  • Credit score takes a bigger hit
  • Bank hits you with late fees
  • Interest rate will increase

90 days late

  • Bank may sell your debt to a collection agency (CRA)
  • Your credit score takes another hit
  • Account may be closed, but you still owe the bank

More than 90 days late

  • Bank holds onto your debt but freezes your accounts
  • Bank may pass your account to a collection agency
  • The bank or collection agency may sue you if you don’t pay

Every time your credit score takes a hit, that's a black mark for at least seven years. Although their impact lessens over time, these hits to your credit might prevent you from renting an apartment, opening a new line of credit or getting a mortgage loan.

An illustrative image of a person learning the signs of excessive credit card debt.

Warning Signs of Excessive Credit Card Debt

Credit cards have many advantages. They’re convenient to use and help build credit. However, having too high of a balance can hurt your financial well-being. The best practice is to keep your credit utilization ratio (your revolving credit balance divided by your revolving credit limit) under 30%.

Below are some warning signs to help you identify if you have too much credit card debt.

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    Borrowing to pay off other debts

    Taking out a loan can help you consolidate your debts. But this should only be used as an emergency solution. If it becomes a practice, you may be in trouble.

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    Missing or making late payments every month

    If it’s difficult for you to keep up with your monthly payments, even the minimum amount due, you’re already dealing with excessive debt.

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    Getting calls from creditors

    Creditors will contact borrowers for late payments. If you’re getting the call from a debt collection agency, your credit card issuer may have already sold off your debt.

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    Being denied credit

    Credit card issuers and other lenders check borrowers' creditworthiness to determine if they can repay their debts. If you find it hard to take out a new loan or credit card, excessive debt may be the cause.

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    Having no savings

    If you don’t have any money saved or are struggling to set aside money for your emergency fund, you may be spending more than necessary.

Expert Insight on Paying Off Credit Card Debt

Determining the best way to pay off credit card debt can be confusing. Understanding how credit card debt works are essential to avoid making costly mistakes. MoneyGeek spoke with some industry leaders to share expert insight that may help you make well-informed financial decisions.

  1. What mistakes should a person avoid when managing credit card debt?
  2. What financial management tip can you share with individuals struggling to eliminate their credit card debt?
  3. When is credit card debt good? When is it considered bad debt?
  4. How can an individual determine the best pay-down method/s to manage their credit card debt effectively?
  5. What strategies or tips can you share with individuals who want to get out of credit card debt?
Todd Christensen
Todd ChristensenAccredited Financial Counselor and Education Manager, Money Fit by Debt Reduction Services, Inc.
Kari Lorz
Kari LorzCertified Financial Education Instructor and Founder of Money for the Mamas
Annie Hanson
Annie HansonFinancial Coach and Owner of Mindfully Money

Additional Resources

Many resources are available to help individuals deal with credit card debt. MoneyGeek compiled a list of valuable resources you may find helpful.

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.

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